Mr. Silver,
Sorry if this has been covered elsewhere, but have you seen a doctor or nutritionist before you started dieting?

1200+ calories of intake per day seems very low for a 5-7 man, esp. since you are exercising on top of that. If your caloric intake is too low, your body could react by going into "starvation mode", thus trying to retain any weight it can.. i.e. leaching from muscles instead of fat, etc.

When I was injured and not able to exercise, I had to drop to 1200 calories to maintain my weight... and I was 105 lbs. at the time!!!